[michaelt]

In many historical societies, religious prohibitions on usury meant the charging of interest of any kind.

Jump in a time machine to 1515 and ask Martin Luther, or to 1260 and ask Thomas Aquinas, they'd tell you it's sinful.

And in the present age, a fair number of Islamic folk consider interest against their religion's rules. So there's a Halal finance industry where, for example, you can get a "murabahah contract" where the bank buys a house, then sells the house to you at a higher price, while allowing you to pay them in monthly instalments.

[LadyCailin]

I love when religions have rule lawyers like this. It readily discredits the religion. As if their all powerful god can be fooled by fancy paperwork or legal loopholes.

[bacchusracine]

They’re not trying to fool God, they’re trying to fool you into going along with it. They don’t care what God thinks and may not even believe in Him at all, but unless they can convince you of the loophole they’re stuck with the rules themselves.

[marcus_holmes]

The bit that isn't rules-lawyered away is that the risk is shared. For the deal to be compliant with the religious law, the lender must accept the same risk as the borrower, equally.

So I guess in this case if the house burns down and the insurance only pays 50% of the agreed value then the lender only receives 50% of their agreed repayment.

[pastel8739]

Isn’t there still risk for a lender in a typical interest-bearing loan? That the borrower will default?

[marcus_holmes]

Usually an interest-paying loan is backed by a guarantee, so the lender can pursue the borrower for repayment by claims on other assets.

[harry8]

Do you love it when people use religion to create rules like this as though people can be fooled into thinking they /know/ the mind of god?

[Exoristos]

Older than any of those:

"Thou shalt not lend upon interest to thy brother: interest of money, interest of victuals, interest of any thing that is lent upon interest" (Deut 23.20 JPS Tanakh).

[nickpeterson]

the letter but not the spirit, like Amish workers using batteries

[inigyou]

It's concretely different. If the house becomes worthless, the "borrower" can walk away from the contract, owe nothing, and the bank keeps the house. The bank had better consider the value of the house, not just the ability of the "borrowed" to pay, when issuing this contract.